Correlation Between Futura Medical and BT Group
Can any of the company-specific risk be diversified away by investing in both Futura Medical and BT Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Futura Medical and BT Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futura Medical and BT Group Plc, you can compare the effects of market volatilities on Futura Medical and BT Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Futura Medical with a short position of BT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futura Medical and BT Group.
Diversification Opportunities for Futura Medical and BT Group
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Futura and BT-A is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical and BT Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BT Group Plc and Futura Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Futura Medical are associated (or correlated) with BT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BT Group Plc has no effect on the direction of Futura Medical i.e., Futura Medical and BT Group go up and down completely randomly.
Pair Corralation between Futura Medical and BT Group
Assuming the 90 days trading horizon Futura Medical is expected to under-perform the BT Group. But the stock apears to be less risky and, when comparing its historical volatility, Futura Medical is 1.18 times less risky than BT Group. The stock trades about -0.16 of its potential returns per unit of risk. The BT Group Plc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 13,940 in BT Group Plc on August 30, 2024 and sell it today you would earn a total of 1,910 from holding BT Group Plc or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futura Medical vs. BT Group Plc
Performance |
| Timeline |
| Futura Medical |
| BT Group Plc |
Futura Medical and BT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futura Medical and BT Group
The main advantage of trading using opposite Futura Medical and BT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura Medical position performs unexpectedly, BT Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BT Group will offset losses from the drop in BT Group's long position.| Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Samsung Electronics Co | Futura Medical vs. Hyundai Motor | Futura Medical vs. Toyota Motor Corp |
| BT Group vs. FC Investment Trust | BT Group vs. Coor Service Management | BT Group vs. STMicroelectronics NV | BT Group vs. Hansa Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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